Outrage of the Month

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Read what Public Citizen has to say about the biggest blunders and outrageous offenses in the world of public health, published monthly in Health Letter.

A Coalition of the Scared

June 2009

Annette B. Ramírez de Arellano, Dr.PH.

As health reform becomes more of a political process and less of a slogan, different groups are establishing their positions. In what can best be described as a pre-emptive strike, six stakeholders in the medical-industrial complex are positioning themselves to ensure their survival and protect their bottom line. They are also working to re-invent themselves as consumer advocates and protectors of the public trust.

Some of them are worried that, it they do not modify how they do business, they will be excluded from a national health plan altogether. The health insurance companies, for example, fear that they would be marginalized under a single-payer system. Similarly, the lobbying groups for drugs and devices are concerned that increased regulation and greater reliance on evidence-based medicine will significantly reduce the scope of their products and hence their market. For its part, the American Hospital Association is fearful of controls on reimbursement that can reduce its billings. And physicians are always wary of changes that impinge on their “usual and customary” practices and fees.

These players have joined a major union, the Service Employees International Union, to pledge a commitment to reduce “overuse and underused of health care by aligning quality and efficiency incentives.” As initially reported, the pledge sought to shave 1.5 percent off the growth rate in health care spending, thereby reducing health expenditures by $2 trillion over the next decade.

How will this be accomplished? The prescription is purposefully vague, although some of the strategies include reducing administrative costs, lowering hospitalization rates, improved management of chronic diseases, emphasizing prevention, and adopting health information technologies. These voluntary “concessions” are not very different from measures that have been talked about for years, with or without universal coverage. They therefore raise the following questions:

If there is consensus on the desirability and feasibility of adopting them, why aren’t these measures already in place as requirements?

If these companies can stay in business while instituting these changes, why have they not espoused them until know?

Are the projected ‘savings’ another way of giving us an estimate of the inefficiencies and price-gouging that have prevailed up to now?

It would be delusional to take these actions at face value. Indeed, as this is written, there has been a marked escalation in the vagueness of the original promises. Various industries have stated that they are not committing to anything specific in terms of actions or savings. What first appeared to be a “goodwill gesture” and even a “peace offering” now seems more like another public relations gimmick that will do little to change a broken health system that costs too much and excludes too many.

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